Rupee Declines 17 Paise to 95.59 Against US Dollar Amid FCNR Swap Deadline Impacting Market Sentiment
The Indian rupee opened the week on a weak note, depreciating by 17 paise to 95.59 against the US dollar in early trading. This decline follows a cautious shift in investor sentiment after the Reserve Bank of India (RBI) advanced the cut-off date for its concessional FCNR (B) deposit swap facility. The RBI announced on August 14 that the facility would only be available for deposits mobilized until August 31, a change from the previous September 30 deadline.
The RBI’s concessional swap facility has attracted $56.84 billion as of August 13, aimed at boosting foreign currency inflows. The rupee opened at 95.50 in the interbank foreign exchange market before slipping to 95.59. On the previous Friday, the domestic currency had closed at 95.42, gaining 3 paise.
CR Forex Advisors Managing Director Amit Pabari noted that while the inflows from the facility have provided substantial support to the rupee, market dynamics may shift beyond this temporary cushion. He indicated that after attracting nearly $50 billion in forex inflows, the RBI’s new deadline could lead to a reevaluation of the rupee’s strength. Pabari suggested that the rupee might find short-term support, but the risk-reward balance appears tilted towards further weakness.
Technically, Pabari identified the 95.20–95.30 range as a crucial support zone. If this level holds, he anticipates that the USD/INR could gradually approach the 96.20–96.50 range in the coming days. Under the FCNR (B) scheme, banks offer attractive interest rates to encourage foreign currency deposits.
In related market activity, the dollar index stood at 99.54, down 0.12 percent, while Brent crude rose by 0.47 percent to $88.94 per barrel in futures trading. Domestic equities also opened lower, with the Sensex dropping 284.85 points to 77,717.05 and the Nifty falling 69.25 points to 24,297.05. Foreign institutional investors remained net buyers of Indian equities on Friday, purchasing shares worth Rs 508.12 crore, according to exchange data. India’s foreign exchange reserves increased by $14.136 billion to $707.002 billion in the week ended August 7, as reported by the RBI.
Observer Voice is the one stop site for National, International news, Sports, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.
Follow Us on Twitter, Instagram, Facebook, & LinkedIn
